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Jakarta Post

Papua to get 5 percent, Luhut says on Freeport divestment

  • News Desk

    The Jakarta Post

Jakarta   /   Sat, March 25, 2017   /   07:50 am
Papua to get 5 percent, Luhut says on Freeport divestment A vehicle passes through gold and copper miner PT Freeport Indonesia’s (PTFI) mining area in Grasberg, Mimika, Papua. (JP/Nethy Dharma Somba)

Maritime Coordinating Minister Luhut Binsar Pandjaitan has said Papua will get 5 percent from the divestment of cooper and gold miner PT Freeport Indonesia, which is required by law to release 51 percent of their shares to the Indonesian entities.

Freeport divestment is part of what is being discussed by representatives of the government and Freeport Indonesia, a subsidiary of United States-based Freeport McMoRan, in connection with the conversion of the contract of work (CoW) into a special mining license (IUPK).

“With the divestment, we will have 51 percent of shares, while Freeport will have 49 percent, with 5 percent of shares for local administrations and for local tribes. With [the dividend from] the shares, Papua will improve its education, agriculture and livestock businesses,” Luhut said as reported by tempo.co on Friday.

He said the shares for Papuan people would never be tampered with and Freeport would pay the dividends to Papua. “It is part of the protection of our people in Papua,” he added.

When meeting with President Joko "Jokowi" Widodo on Wednesday, Papua Governor Lukas Enembe demanded 10 percent shares of Freeport.

Freeport Indonesia has refused to accept a government demand, and it converted its CoW into a special mining license (IUPK). The company argues that IUPK would effectively annul its CoW, signed in 1991. It has threatened to take the case to international arbitration if a mutual agreement is not met in the next few months. (bbn)